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Stack #1521257
| Question | Answer |
|---|---|
| Expansionary fiscal policy is used by the government to A) reduce the budget deficit B) create new jobs in the economy C) reduce the national debt D) control inflation | B |
| If MPS=0.50 calculate the value of the government spending multiplier and the tax multiplier | 2 |
| Fiscal policy refers to.. | the spending and taxing policies used by the government to influence the economy |
| Which of the following is NOT a category of fiscal policy? A) gov. policies regarding the purchase of goods and services B)taxati C) government policies regarding transfer payments and welfare ben D) gov. policies regarding money supply in the economy | D |
| During recessions, government spending usually | increases because unemployment payments increase |
| C= 100+ .6Yd If the income is 1,000 and net taxes are $300 consumption equals… A) 800 B) 580 C) 520 D) 700 | C |
| The economy is in equilibrium when aggregate output equals consumption spending. T/F | False |
| The government purchases multiplier is….. | the ration of the change in the equilibrium level of output to a change in government purchases |
| If the MPC is .75, the government spending multiplier is…. A) 3 B) 1.75 C) 4 D)2.5 | C |
| If the MPC is 0.7 the tax multiplier is…. | -2.33 |
| Whats the correct sequence of events during a recession | Unemployment rises, income falls, tax revenue falls, unemployment benefits ride, and the budget deficit rises |
| As a measure of the money supply, M1 differs from M2 in that…. | M2 includes M1 plus savings accounts, money market accounts, and other near monies. |
| What institution has formal responsibility for setting US monetary policy? | The FOMC |
| The economy is beginning to slip into a recession. The Fed will most likely respond to this state of the economy by….. | purchasing government securities to lower the interest rate |
| What causes the barter system to be inefficient? | It requires a double coincidence of wants |
| An example of money serving is an…. | store of value |
| The main disadvantage of using money as a store of value is that…. | the value of money actually falls when prices of goods and services rise |
| After World War II cigarettes were used as money in Germany this is an example of... | Commodity money |
| Currency held outside banks+demand deposits+ travelers checks+other checkable deposits= What? | M1 |
| Travelers checks are…. | included in M1 and M2 |
| Jaime transfers $2,500 from his checking account to his savings account. This transaction will…. | decrease M1 and not change M2 |
| Which of the following is considered a liability to a bank? A) time deposits B) the banks buildings and equipment C) reserves D) the banks loans | A |
| The central bank of the United States in known as the…. | Federal Reserve System |
| A $40 million cash deposit will allow an expansion supply to…. (required reserve ratio is 20%…. | 200$ million |
| As commercial banks keep more excess reserves, money creation…. | decreases |
| Among the members of the Federal Open Market Committee…. | are the seven members of the Board of Govvernors of the Fed |
| The Fed acts as a lender of last resort for the banking system… T/F | True |
| The discount rate is…. | the interest rate of the fed charges commercial banks for borrowing funds. |
| What is an action by the Federal Reserve that is designed to increase money supply? | Buying government securities in the open market |
| Which is NOT used by the Federal Reserve to change money supply? A) open market operations B) federal tax code C) the requires reserve ratio D) discount rate | B |
Created by:
murphy1717